Marketing insights for selling to the world's toughest market. From Rick Spence

Wednesday, February 22, 2012

The Flesh and Blood Cash Machine

One of the key differentiators and characteristics of the SME market is that when business owners are considering the purchasing of equipment, investing in an ad campaign, or making a donation to a local charity, they are spending their own money. They don’t have access to a corporate account that represents virtually limitless funds from anonymous investors, as executives tend to have in large corporations. They are acutely aware that every dollar they spend comes from their own pocket.

The other day an entrepreneur told me about a phone call he’d recently received from a local homeless charity. When he found out how much they were asking him to contribute, on behalf of his company, he had this to say:

“The amount you’re asking would pay for my family to go on a week-long ski vacation to Whistler. And I could bring my parents, too. So tell me again why I should contribute to this cause rather than give my family an experience they would never forget?”

In the end, the entrepreneurs anted up most, although not all, of the donation the charity had requested. He probably always intended to give. But he wanted to make damn sure that the canvasser knew that when he asked that company for a donation, it was coming out of somebody’s pocket—not a special budget intended for charitable contributions, not out of some vast anonymous slush fund. It was important to him that the canvasser understand the choices that business owners have to make when they are called upon to invest large sums in non-strategic activities.

In my experience, most business owners are grateful for the support of their community; they are glad and even proud to be able to give back when their level of success allows it. But many business owners are running highly leveraged companies, and they don’t have a lot of cash to throw around.

So here’s the bottom line for charitable canvassers and vendors’ sales managers alike: Respect the pocketbook of the entrepreneur. Remember where that money’s coming from. And make sure you make a good case for the deal that you’re proposing. Because the funds aren't coming out of a budget. They're coming out of MY pocket.

Your Guide

Writer, speaker and consultant on business growth, entrepreneurship and opportunity. My column appears weekly in the National Post. My speaking topics include innovation, best practices, social media, and the future of business success.
Please e-mail me: rick (at) rickspence.ca
Because some of you have asked: (416) 231--8920